US SEC Probes Binance Over its BNB Token

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The US Securities and Exchange Commission (SEC) is set to open an investigation into cryptocurrency wallet and exchange Binance over the 2017 initial coin offering of its BNB token, which is now the world’s fifth-biggest. The Commission is said to be examining whether the token’s offering constitutes a security sale, which would have needed to be registered with the agency.

In a statement to Bloomberg, Binance said that “it would not be appropriate for us to comment on our ongoing conversations with regulators, which include education, assistance, and voluntary responses to information requests” and that it “will continue to meet all requirements set by regulators.”

The probe stands with the claim that the initial coin offering of the BNB token amounted to the sale of a security that should have been registered with the  SEC. According to the 1946 US Supreme Court decision defining investment contracts, virtual currency may fall under the SEC’s remit if investors buy it to fund a company or project with the intention of profiting from those efforts.

Prior to this investigation, Binance CEO Changpeng Zhao also had an ongoing SEC probe over his links to two firms trading on Binance.US. The exchange also faces other investigations including a joint investigation by the Internal Revenue Service and the Department of Justice over tax and money laundering concerns, and a Commodity Futures Trading Commission investigation into insider trading and market manipulation.

While probes are ongoing in the US, Binance has recently continued to win regulatory approvals in Europe and the Middle East, most recently in France, Italy, and Dubai.

This article is published on BitPinas: US SEC Probes Binance Over its BNB Token

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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